ORC Sightlines

July 2003

ORC’s Name Change Reflects Global Reach

Organization Resources Counselors, Inc. is celebrating its 50th anniversary by becoming ORC Worldwide. “The name change simply reflects the reality of our business now,” says Robert J. Freedman, President and CEO of the firm. “With offices throughout the U.S., Europe, and Asia, we serve multinational corporations around the globe.”

Widely known simply as ORC, the company traces its roots to an innovative approach to employee relations begun by John D. Rockefeller, Jr. after a disastrous strike at one of his mines in 1914. Rockefeller set up a small group of experts to counsel him on a regular basis about labor matters in all of his companies.

That group became so effective in improving employee relations that soon non-Rockefeller companies began to seek its advice. In 1926, it was incorporated as a nonprofit, tax-exempt educational and research corporation, called Industrial Relations Counselors, Inc. (IRC), which still exists today. In 1953, IRC became a minority shareholder in a new, for-profit consulting firm that became Organization Resources Counselors, Inc.

Thirty years ago we opened our first non-US office in London, and since then we have been steadily expanding our capabilities to help clients manage a global workforce. As ORC Worldwide, we will continue to hone our expertise for the benefit of our consulting, information, and Network clients.

Neutrality Clauses Don’t Require Silence

That was the core learning at last month’s meeting of the Labor & Industrial Relations Group (LIRAG). Companies that sign off on neutrality clauses in collective bargaining agreements often believe that they cannot therefore communicate to employees during attempts by the union to organize non-union facilities. This is not the case. While wording differs and some neutrality clauses may be more restrictive than others, it is usually permissible for the company to present its case. As long as its communications are not disrespectful and are truthful, companies can:

Be aware, however, that whatever management says is probably subject to arbitration and may well come up in your next negotiations as the union attempts to tighten the neutrality clause.

Companies Still Struggle with Diversity Business Case

Most of the HR leaders participating in the June meeting of the Human Resources Solutions Network agreed that their companies continue to struggle with making a convincing business case to justify investments in diversity management. A recent, well-publicized study appears to challenge the validity of the traditional business case, and some claims made in favor of diversity, such as “diverse teams are more creative” are being questioned. Part of the problem seems to be confusion of diversity with EEO and affirmative action. HRSN members shared strategies they are using to address the criticism, including:

For example, a cascade system of diversity councils involving senior management to set diversity strategy at the corporate, business unit, and divisional levels can help to make sure diversity initiatives directly support business strategy. To further integrate diversity into functional HR activities, some companies have a formal HR plan that includes explicit “diversity checks” in every functional section as a way of testing that diversity management is built into programs and practices.

The Human Resources Solutions Network comprises HR leaders in divisions or business units of large North American companies.

Supreme Court’s Affirmative Action Decisions—Management Implications

After 25 years of uncertainty, the Supreme Court upheld affirmative action in college admissions, thereby affirming that there is a “compelling state interest” in using race as a factor in college admissions and, by extension, in employment practices as well.

The decisions will allow employers to continue to use race as a factor in mentoring, development, and other programs as long as there are disparities between minorities and non-minorities. Justice O’Connor did make clear that these race-conscious policies must be limited in time and that they must be terminated as soon as there is no further reason for them. That will require employers who have these programs to continue evaluating their organizations to ensure that such programs are still necessary. Any programs that are race conscious must be very limited in their scope. For example, mentoring or development programs that admit only minorities might not be sufficiently “narrowly tailored” to pass muster.

The Future of the Global Workforce

At the 27th Annual ORC Joint Roundtable meeting in Longboat Key, Florida, discussions centered on the complexities of managing a global workforce in the 21st century. In his key note presentation, ORC Executive Vice President Geoffrey Latta described some of the new HR challenges facing multinational corporations:

Companies are responding with innovations in how they select, pay, and manage employees assigned to positions outside their home countries, but policies and HR systems are still in transition as organizations struggle to match strategic rhetoric with actual practice. Career management is a good example. Most multinationals say they want truly international employees, but employees often perceive a different picture. If senior management is primarily from the headquarters country, if a large percentage of expatriates leave the company when they return home, and if the careers of internationally assigned employees are managed more by chance than by planning, it will become harder and harder to interest the most talented in joining the global workforce.

The future of this workforce is as yet unwritten. So far we have more questions than answers:

ORC’s international compensation roundtables are networks of senior HR decision-makers with responsibility for expatriate programs.

Creating Global Leaders

The following is a summary of “Your Most Important Job: Creating Global Leaders” by Robert Freedman, ORC Worldwide’s President and CEO, which appeared in the June, 2003 issue of Chief Executive Magazine. For the full text, go to http://www.chiefexecutive.net/depts/thoughtleader/189.htm.

How global is your global company? Perhaps the best test of whether a multinational company is prepared to succeed globally over the long run is the range of nationalities and degree of international experience among its senior leadership. A management team with little experience living and working outside the headquarters country—no matter how smart, technically sound, and politically astute—is unlikely to have the cross-cultural agility and the credibility needed to earn the trust of partners, investors, employees, government officials, and markets in all parts of the world.

Companies need to think about global talent management from a systems perspective. Three crucial organizational systems should be considered—organizational structure, top-down communications, and basic compensation philosophy. Although there is no one “right” way to manage these systems, this article looks at some best practices from leading multinational corporations.

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